Facts

The claimant, MWP, brought an arbitration claim against E claiming rights in respect of shares in an AIM listed company. S funded E’s defence of that claim. The arbitrators upheld E’s defence and dismissed MWP’s claim, holding that the shares were beneficially owned by S. MWP unsuccessfully appealed that decision to the Commercial Court. MWP then sued S, a related company, and others in the Commercial Court raising issues the same as or similar to those raised by its arbitration claim against E.

S and the 2nd defendant applied for an order striking out the claim. They also applied for summary judgment on the merits.

The argument that the claim was an abuse was threefold: (a) it was said that there was privity of estate between E and S, such that MWP was estopped from making the same allegations against S that had failed in the arbitration against E; (b) the claim, challenging the tribunal findings, was for that reason an abuse of the court’s process; (c) MWP had obtained ‘satisfaction’ from E, and thereby discharged any liability that S and others might otherwise have had.

Issue

(1) Was there privity of estate so that MWP was estopped?

(2) Is it an abuse of the court’s process for a party (A) who has failed to establish in an arbitration a claim that another (B) has acted in breach of fiduciary duty then to sue a third party (C) in court, alleging that C dishonestly assisted B in committing a breach of fiduciary duty?

(3) Had MWP obtained satisfaction, and thus discharged the cause of action alleged?

(4) Did the claim in the action have any realistic prospect of success?

Held

Striking out the claim,

(1) MWP was not estopped, as against S, from advancing the allegation rejected by the arbitrators.

(2) An attempt to re-litigate in court issues which had been adjudicated on, against the claimant, by an arbitral tribunal of competent jurisdiction could however be an abuse. Whether it was such an abuse would depend on the circumstances. In this instance, the claim was an abuse. Bairstow v Secretary of State for Trade and Industry [2004] 1 Ch 1 (CA) considered and applied.

(3) The doctrine of satisfaction had no application where the outcome of the arbitration was the dismissal of MWP’s claim. It is an abuse of language to say that a claimant in an arbitration has received “satisfaction” from the respondent, when the claim has been dismissed.

(4) The court was not satisfied that MWP’s claim had no real prospect of success on its merits.

Comment

This seems to be the first decision that it can be an abuse of the court’s process to attempt to re-litigate issues raised before a tribunal, rather than a court, of competent jurisdiction. The issue was raised in the libel action,McKeown v Attheraces Ltd, where the earlier decision was that of a sporting tribunal endorsed by the High Court upon judicial review. In that case, the question was not decided by Tugendhat J, who did not consider that the issues in the two disputes were the same. In the present case, the decision on the abuse of process issue was dispositive, as all the other bases on which S sought to obtain judgment against MWP failed.

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